Chinese Automaker Hires Italdesign Giugiaro

By Brendan Moore

01.20.2010

Giugiaro Ford Mustang

Giugiaro Ford Mustang

If you’re an automotive enthusiast, and have spent any time discussing Japanese cars and their design, or lack thereof, with other auto mavens, sooner or later someone will say something similar to the following:

“I’ve never understood why the Japanese automakers, with all of their resources, just don’t hire the Italians to design their cars. They obviously need some help in that area and the Italians are awfully good at it, so it seems like a match made in heaven. The Japanese are awfully good at engineering their cars and screwing those cars together, the Italians are generally not good at those parts of the car business unless you get up to a $100,000 price, but they are good at styling cars, so let’s just get them together.”

Or, something like that.

Dream on, right?

Well, here is the next best thing, sort of.

Hybrid Kinetic Motors Corp., of Pasadena, California, a Chinese-American auto manufacturing start-up, signed a $500 million USD contract yesterday with Italdesign Giugiaro, led by the famed Giorgetto Giugiaro, to design eight vehicles for the new auto company.

2007 Italdesign Giugiaro Vadho

2007 Italdesign Giugiaro Vadho

Giugiaro said that the contract calls for the design of sedans, SUVs, minivans, crossovers and light commercial vehicles for Hybrid Kinetic Motors Corp. It is easily the largest contract awarded to Giugiaro, of Torino, Italy, in its 43 year-old history.

Hybrid Kinetic Motors Corp., of Pasadena, California, led by Benjamin Yeung, a former Chinese auto executive, is planning on erecting a plant in Bay Minette, Alabama in 2013. The plant, according to Hybrid Kinetic, will employ 4000 people and build 300,000 units annually in the first year of operation. It is all part of Hybrid Kinetic’s master plan to invest $20 billion over the next eight years with the goal of building 6 million vehicles a year by 2018.

Hybrid Kinetic’s plans are hugely ambitious and have been derided by some and merely doubted by most; the combination of unusual multi-fuel hybrid engine, lack of experience as a manufacturer, the CEO’s personal history, huge production claims and very odd financing structure have produced those reactions in spades.

As we stated in an article about Benjamin Yeung last October, the financing plan goes like this:

He plans to solicit wealthy Chinese nationals in mainland China for a minimum $500,000 investment by dangling the promise of permanent US residency in front of them.

And how would this work, exactly?

It works this way:

The United States currently has a pilot visa program (EB5 visa program) that rewards a minimum investment of $500,000 in a region with high unemployment or specific rural areas (such as southern Alabama, where Yueng wishes to build his plant) with a permanent residency visa.

A spokesman for Hybrid Kinetic Motors, Vincent Wang, stated that over 2000 investors in mainland China have already expressed interest in the offer.

“A lot of people in China want to move some of their money out of China,” Wang said.

However, the pilot program is just that – a pilot program that could end suddenly at the whim of the United States government. Yueng is doing his best to make sure that doesn’t happen, spending $120,000 last year in Washington in lobbying fees to make the program permanent. He also paid former president Bill Clinton an undisclosed amount to make a speech about very little in Hong Kong in 2008.

The engine to be used in the vehicle was designed by FEV Motorentechnick GmbH, of Aachen, Germany, and is based on a 1.5 liter hybrid engine.

HK Chairman Yung Benjamin Yeung

HK Chairman Yung Benjamin Yeung

“Our mission is to develop cars with American style, European quality and Japanese price,” chairman Yung “Benjamin” Yeung, told Alabama state officials and reporters at the press conference in Montgomery, Alabama yesterday.

Yeung was formerly the chairman of Brilliance Automotive, BMW’s joint venture partner in China, but was forced to flee China in 2002 with his family after being accused of unspecified financial transgressions. Yeung settled in Los Angeles in 2003.

So, will Hybrid Kinetic realize their lofty goals, and, in the process, put some great Italian design out on the road, more or less on the cheap?

Only time will tell if the big dreams are matched by big deeds.

COPYRIGHT Autosavant – All Rights Reserved

Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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9 Comments

  1. This all sounds shaky to me. I hope Italdesign Giugiaro gets their money upfront.

  2. That’s a lot of sales in a market that already has too much capacity. The government people in Alabama should proceed with caution.

  3. Meh, that’s funny because I have had that conversation with a friend of mine about why companies like Toyota and Honda don’t send out their design work to the Italians or the British, or even the Germans.

    Any improvement would be welcome.

  4. Looking at that Mustang makes me think maybe Ford should sign a contract with Giugiaro too.

  5. A few years back, Pininfarina (the designer of Ferraris) was up for sale. On various websites here and there I proposed that Honda buy the firm. If only Honda had listened to me, for then we might not be saddled with these grotesque Acuras. And the Crosstour. But… I’ve just laid eyes on the newest Mazda 5… my eyes, my eyes!

  6. Chinese have guts that American’s had 100 y.o. but no more. Many recent startups in traditional industries in US are founded by Chinese immigrants. It also reminds me Tucker and DeLorean. Both turned to shady financial schemes. Establishing new car company in developed country is next to impossible. Wait until Big Six starts lawsuits.

  7. James2, add the new CR-Z who’s Honda newest “plucked chicken” (that term was used for the 1962 Dodge and Plymouth and I decided to popularize it to other cars ^^;), from what I read as comments on Autoblog and Jalopnik…. Ironically one concept-car then Giugario designed for Jaguar, the Kensington which was refused by some conservative Jaguar fans, find another way to Lexus for the 1st-gen GS-300 http://leroux.andre.free.fr/simi52.htm

    Besides Pininfarina, Bertone was also up for sale but Fiat menaged to win the bid. Bertone could had been another opportunity for Honda if they couldn’t buyed Pininfarina.

  8. IF this company exists in the future, you have to believe that they will allow the cars to go from design to production relatively unmolested. They’ll do whatever changes are required for safety and durability and leave it at that, which will be a good thing from my point of view.

    Who knows if they’ll stick around, but I hope they get some attractive cars out while they’re in business.

  9. The italians have done lots of work for the japanese car industry. but most of the work is kept quiet. One car I know was done in Italy was the subaru SVX. My rule of tumb is, if a japanese car is good looking, there was probably some influence from an italian design house.

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